Deposit Rate Cuts by Banks and NBFCs Begin
Why in the news
Lenders began lowering deposit rates as another repo cut was anticipated, helped by easier liquidity and slow early-year credit demand.
Key facts
- RBI bond purchases since January: ₹1.4 lakh crore, with a further ₹80,000 crore buyback announced.
- Liquidity swung from a ₹1.3 lakh crore deficit in March to surplus.
- Government-backed RBI Bonds and SCSS kept 8.2% for April-June.
| Lender | Change |
|---|---|
| HDFC Bank | Special deposits ended; 7.35% and 7.40% both cut to 7% |
| Yes Bank | FD rates down 0.25 points |
| Bajaj Finance | Long tenures down 0.25 points; 42-month FD 8.15% from April 10 |
| Bandhan Bank | Savings rates 3-5%, earlier 6% |
Investor angle
- AAA-rated Bajaj Finance FD at 8.4% versus a 10-year G-sec yield of 6.5%: a 1.9-point spread.
- FDs suit retirees seeking steady cash flow; debt funds fluctuate with markets.
Exam angle
- Liquidity tool: Open Market Operations.
- Related terms: repo rate, rate transmission.